Effects of Price Model Copycats in the Ski Industry

Abstract

This article investigates the impact of the introduction of a greatly reduced seasonal ski pass for overnight stays in winter destinations. The analysis covers 59 winter sports destinations in Switzerland for the winter seasons 2012/2013 to 2017/2018, of which 11 introduced the "Magic Pass." Winter destinations without the reduced ski pass constituted the control group. Panel difference-in-differences estimates show that the Magic Pass in 2017/2018 led to an increase in domestic overnight stays in the winter season of 31%. However, foreign overnight stays in the same period were not affected by the price discount. Overall, the magnitude of the discount price effect was lower than that of a previous attempt. Control variables such as average snow depth and temperature for the winter months of December to March were not or only marginally significant. Since the positive effects of price reductions were limited to domestic overnight stays, price reductions should be viewed critically.